This week, failed solar company Solyndra LLC took a step toward paying off its $783.8 million debt by selling off desks, chairs, breakroom microwaves and company laptops. The core of the company — its Fremont factory and intellectual property — is expected to hit the auction block next.

The auction of Solyndra’s “core assets,” which court documents list as its Fremont manufacturing plant and land, intellectual property, and rights under contracts and leases, is scheduled for Nov. 18.

How much can be recouped of Solyndra’s $783.8 million in secured debt remains to be determined, but the auction could certainly help. In court documents, Solyndra lists the book value of its new “Fab 2” factory in Fremont at $298.76 million. The 31-acre site includes a 280,000-square-foot manufacturing structure and a two-story, 30,000-square-foot office building. The company also lists nearly 200 patents or patent applications among its assets.

The first creditors to get paid back will be Argonaut Private Equity and Madrone Capital Partners, which earlier this year loaned the company $75 million, of which $69 million was spent.

As a condition of that investment, the U.S. Department of Energy allowed Solyndra to restructure part of its debt so that Solyndra would pay those firms back first, rather than the U.S. government, which gave the company a $535 million loan guarantee.

That federal loan guarantee has stirred intense controversy in Washington, D.C., where Republican lawmakers have questioned whether the Department of Energy had the legal right to restructure the debt and put private investors’ interests ahead of the government.

Solyndra reported in court documents in October that it had 20 potential buyers interested enough to sign non-disclosure agreements to receive confidential information about the company.

Bidders interested in Solyndra’s assets have to submit a written bid to the company’s financial advisers, Imperial Capital LLC in San Francisco, by Nov. 16. Bidders have to submit financial statements and other documents to prove that they’re financially able to close the deal.

If Solyndra gets more than one bid, it plans to hold a private auction on Nov. 18 at the offices of its bankruptcy law firm, Pachulski Stang Ziehl and Jones LLP in San Francisco, where interested parties can try to outbid each other.

The U.S. bankruptcy court is then scheduled to approve any potential sale at a hearing on Nov. 22.

Imperial Capital and Pachulski did not respond to requests for comment.

Liquidation part one

While Solyndra and its financial advisers are handling the sale of the company’s core assets themselves, they hired San Diego liquidation firm Heritage Global Partners to auction off the company’s office equipment, surplus finished solar panels and other items on Nov. 2 and 3.

The auction was still ongoing as of press time, but a dizzying array of items were for sale. During an auction preview on Nov. 1, potential bidders perused stacks of Dell laptops, piles of blue polo shirts with the Solyndra logo, and rows and rows of manufacturing equipment that may have been unidentifiable to anyone not in the solar sector.

A wide variety of people were interested in the high-profile event, from curious local residents who wanted to see if they could get a good deal on a TV to small business owners hoping to find specialized machinery.

Kirk Dove, managing partner with Heritage Global Partners, said he expected 1,000 people to attend the auction in person and another 2,000 to participate online.

One of the browsers, Lance Porter, owns a glass fabrication company in Vacaville and was looking for machinery that could pick up large pieces of glass. He hadn’t found any yet, and said he’d expect a lot of bidding competition since so many people knew about the auction.

“If they had something in the area we needed, it would obviously be in next-to-new shape,” Porter said, since Solyndra wasn’t in business for very long.

Diana Samuels can be reached at 408.299.1835 or dsamuels@bizjournals.com.